Transforming personal finance since 2011

#69 — Lockdown silver linings?


January 12th, 2021

By Andrew Craig

Reading time: ~ 11 minutes

If life gives you lemons...

Long time readers of these articles may be aware by now that one of the things that I try to do in life as an explicit philosophy, is to attempt to seek out and place my focus on "good news" rather than "bad" whenever possible.

This approach may seem rather naive and Polyannaish to many, particularly to us inherently hard-bitten and cynical Brits. I would argue that it is not, however. It is actually an entirely sensible and helpful way of looking at the world - and, sadly, all too rare these days. In defence of this general world view, I would ask you to consider the following quotes:

"People aren't disturbed by things, but by the views they take of them…"

  • Epictetus.

"The happiness of your life depends upon the quality of your thoughts: Therefore, guard accordingly, and take care that you entertain no notions unsuitable to virtue..."

  • Marcus Aurelius.

"There is nothing either good or bad, but thinking makes it so…"

  • William Shakespeare.

"Most folks are about as happy as they make up their minds to be..."

  • Abraham Lincoln.

“Always remember. Your focus determines your reality...”

  • George Lucas.

If the same broad approach to a "good" life seems to be shared across about twenty centuries by no less consequential a set of human beings than one of the truly great Ancient Greek Philosophers, arguably the best Emperor Rome ever had, one of the best writers of the English language in history, conceivably America's greatest President and even the bloke who created Star Wars - I'm in!

In all seriousness, as far as I'm concerned, there is a great deal of evidence - from history, psychology, philosophy and elsewhere - that this fundamental approach to life is an unalloyed good - for you as an individual and, more importantly, for society as a whole. After all - the more people who approach things this way, the better a society we will all live in. It is only a shame how unfashionable it seems to have become in a "post-modern" era so full of nihilism and negativity.

"Positive thinking back catalogue..."

As I say - I have written about this a fair bit over the years. Back in 2016, I asked "Are you wearing your “glass half full” glasses today?" The week after the Brexit vote I suggested there might be "Nothing to fear but fear itself". And then only a few weeks ago I wrote again to make the case that "The World is the Best it has Ever Been..." notwithstanding how many people currently think precisely the opposite.

Given this stance, recently I have been doing my best to work out what possible "silver lining" there might be in the indisputably very dark "cloud" of our pandemic- and lockdown- altered world...

...and one of the things that has occurred to me, which may be worth highlighting, is the opportunity these lockdowns have given us all to have a crack at a bunch of the personal admin' that hangs over most of us most of the time.

We are stuck at home. We can't go to the pub. We can't go to the gym... or to a football or rugby match, or to the theatre, a concert or the cinema. We can't go shopping (for anything other than groceries at least), we can't visit friends and we can't have them over to visit.

We can't go on weekend breaks to the countryside. The list of things that we used to be able to do and are not currently permitted to do is very long indeed...

Given all of the above - surely the one thing we can (and probably should) do is any and every piece of personal / life admin' that we have not been able to do for however many years (decades perhaps?), precisely because we have been able to do all of those other lovely things?

For my own part - in the last few weeks, our cupboards and drawers have got gradually more organised and a flock of new white-boards has flourished in my home office. I've ordered a tonne of books I always meant to read and am now finally stretching every day (even if I can't go to the gym).

If I'm honest, I'd rather be able to visit my family and my in-laws, look forward to the Six Nations Rugby and have confidence in the prospect of an overseas holiday at some point this year - but we can only play the hand we have been dealt...

Bentham, Zeno, Seneca et al...

For the avoidance of doubt, I really, really don't mean to trivialise the current situation in saying any of this. I know that there will be no shortage of folk who might find writing about "overseas holidays" and the merits of getting personal admin' done at a time like this more or less crass and insensitive.

But I have to disagree with that position. To the extent that I have any particularly fixed philosophical position - I am a Benthamite and a Stoic. For those who perhaps aren't familiar with the work of Jeremy Bentham - (he is WELL worth the time if you're not), his basic stance was that:

"...it is the greatest happiness of the greatest number that is the measure of right and wrong..."

(For what it is worth - this fundamental world view meant that he was arguing for gender equality, and equality regardless of sexual preference, for animal rights and for the abolition of slavery, capital punishment and physical punishment as early as the late 18th Century. That is to say that he was arguably well over a century ahead of his time (if you compare his position to the timing of certain US Constitutional amendments - on female suffrage (1920) - for example). An amazing individual if you ask me)...

Anyway - my point here is that there really isn't much any of us can do about the aggregate negative of the current situation. Whether you are for lock-downs or against them, for example, no amount of raging on social media is going to make much difference to the fact that they are currently in force.

I am firmly of the belief, therefore, that we would be far better served by focusing on the positive things that we can do, rather than railing against the negative things that we can't do much about.

“If Once You Start Down The Dark Path, Forever Will It Dominate Your Destiny...”

  • Yoda

Taking care of "personal admin'" might seem like an entirely trite and marginal thing to suggest at a time like this but there is a tonne of evidence that lock-downs are causing a huge rise in alcohol consumption, rates of depression, domestic violence and divorce.

If it is a choice between sliding in that general (miserable) direction or doing our very best not to do that - perhaps by choosing to use this time to work on ourselves as best we can, then I think the aggregate Benthamite "good" as a result for our society as a whole could actually be quite meaningful.

We know full well that many people are suffering at the moment. Whether as a direct result of CV-19, or indirectly (for many millions more) as a result of the massive collateral damage being inflicted by our policy reaction to it.

Unemployment is surging for very obvious reasons. Entire sectors of our economy are being torn apart and could well never be the same again.
I would argue that if we are lucky enough still to be gainfully employed, solvent and healthy, we perhaps owe it to those who are less fortunate right now to "chose the light", rather than the "dark-side" as best we can...

...to chose to make the very best of this situation, rather than slide into depression, misery and excessive booze consumption. To use this time to make the very best of ourselves, notwithstanding what is going on around us - so, at the very least, we can support our dependents, be a force for the "good" side of the equation and, more practically, continue to pay the taxes that will fund the many, many billions that the government needs now more than ever.

As John F. Kennedy put it in one of my favourite quotes of all time, at times like this perhaps we should...

"...ask not what your country can do for you, ask what you can do for your country..."

The "silver bullet" that is financial literacy...

...and I would argue that getting your finances sorted could be one of the very most consequential things you could be doing in that respect if you haven't already.

Spreading practical financial literacy has been a crusade of mine for more than ten years now, as many long time readers of these articles and anyone who has read my books will be aware. I think that a massive uplift in people's basic understanding of investment and finance is nothing less than a kind of "silver bullet" - for the individual who develops it - and for society as a whole by extension, for all sorts of reasons. Given what is going on around us, I think this has never been more the case than it is today.

To that end, if you even vaguely agree with my thought process here, and are galvanised to make a difference to your finances, or to kick that process off at the very least - you might consider spending some time on the OPINION section of our website and engaging with a tonne of content on there.

In 2020 alone, for example, we began the year with a five article series on the idea of "100 minus your age" - a powerful way of thinking about how you might organise your finances based on your age and attitude to risk.

In the four further articles in that series we looked at the crucial difference between investing and trading and the vital importance of ignoring the news, how you might use big equity indices to keep things simple and at the exceptional long run track record of smaller companies and of the biotech industry.

Immediately after that series, I wrote about how to react to periods of volatility and big crashes, like the "coronavirus crash" we had in the first quarter of the year and, in the last few weeks, I have written to explain how important it is to understand volatility-adjusted returns, rather than just returns alone (particularly if you're investing in crypto!) and about a very important real world investment risk that most of the finance industry never even mentions: Sequence risk - something that can make a six or even seven figure difference to your money over time.

The other thing we did this year was pull together and publish my second book, "Live on less, invest the rest..."

This included a fair bit of the content I have referenced above and a whole lot more that has been brewing over the last few years - mainly as I have responded to questions from people in our online Community.

I would like to think that some or all of the above might be more or less helpful stuff if you're interested in getting your financial house in order. This is certainly the feedback we have had from people throughout the course of the year. If you do have a bit more time on your hands at the moment, please do consider making use of what we have to offer.

Dearie me

Well - my original plan with this article was, relatively simply, to say:

"...why don't you use any extra time you might have during lock down to sort your finances out? We can help you with that if you like..."

As ever - I've shown myself to be broadly incapable of concision, and have run to nearly 2,000 words. I hope you have found it vaguely useful notwithstanding this fact and, even more, that you might find yourself even moderately fired up to use any extra time you might have at the moment to find your own particular "silver lining" in this situation - whether that be sorting your finances out or, indeed, something else entirely...

Until next time...